Vale Ltd. is looking to invest $2.5 billion in Sudbury in the next five years -- but only if the mining giant can cut its costs and increase productivity.

Vale executive John Pollesel delivered that message to the Greater Sudbury Chamber of Commerce at the business organization's annual general meeting Wednesday night.

Pollesel has just been appointed chief operating offi- cer of Vale. That means he is in charge of all of Vale's opera- tions in Canada and the United Kingdom, and will continue to be based in Sudbury.

Pollesel spoke to chamber members about his company's vision to become the world's "biggest and best mining com- pany."

Huge investments are planned for Sudbury, but they will only be made "if we can demonstrate that we are able to bring our cost structure into line and improve our produc- tivity," Pollesel said before he delivered his talk.

"But, having said that, I'm very confident we can do that."

Pollesel said things are going well at Vale's Ontario opera- tions after the almost one-year strike by 3,000 production and maintenance workers.

"We spent a lot of time up front, trying to prepare every- body for this return to work. I think what we really want to do is try to put the past behind us and look forward.

"And it's very important for us because, as I say, in order to attract the investment, we need to demonstrate that we can change; that we can improve our productivities, that we can improve our cost structure. That's really what we're work- ing on right now."

Among investments planned for Sudbury are between $1.5 billion and $2 billion in an atmosphere emissions reduc- tion project, the most signifi- cant environmental investment "ever" in the Sudbury Basin, said Pollesel.

The investment is a good one because "not only do we have clean air, but it also provides certain spinoff benefits for the community as well."

Vale is also investing $360 million to develop Totten Mine, which is scheduled to be brought into production in late 2011.

The mine will employ about 130 people, including members of a neighbouring First Nations community.

Pollesel stressed in his pre- pared talk that while Vale is committed to a long future in Sudbury, "we must demon- strate our willingness and abil- ity to become a more produc- tive and efficient operation.

"Aspiring to the status quo is simply no longer an option."

Productivity at Vale's Ontario mines is half that of compara- ble mining operations, he said, and costs continue to rise.

The company's assets are aging and ore grades are declining, so mining is getting "deeper and more expensive."

"We have some of the best and most highly skilled miners in the world," he said.

"The point is, without invest- ment and renewal of infrastruc- ture, we will not achieve the required productivities to remain competitive."

Pollesel was mostly silent publicly during the strike by United Steelworkers in Ontario, but he spoke out Wednesday evening against critics whom he said "took advantage of the situation to question Vale's commitment to Canada."

Pollesel said "the numbers speak for themselves."

Vale invested $1.73 billion in sustaining capital expenditures in Canada in the three years after it acquired the former Inco Ltd. for about $19 billion.